Anadarko credit rating put on negative watch

While the Gulf of Mexico oil spill is largely being labeled as BP’s problem, many forget that Woodlands-based Anadarko has a 25 percent stake in the project and may be on the hook for that portion of any cleanup costs.

With that risk in mind, credit rating service Moody’s revised its outlook on Anadarko’s ratings from “stable” to “negative,” meaning there’s a chance for a downgrade in the future.

BP has already seen its credit rating dropped one notch by the three major agencies, but the oil giant started out in a stronger position with ratings near the top of the scales. Anadarko has a Baa3 rating, just one notch above so-called “junk” rating.

A junk rating would make Anadarko’s cost of borrowing jump significantly and could also trigger clauses in certain contracts or agreements that could further complicate the company’s financial standing (not that I know of any specifically, but it’s not uncommon).

Anadarko’s financial position has been strong recently with good net income and cash flow (as well as a steady stream of successfulprojects). But Moody’s notes it’s not yet known how much of the $990 million in costs BP has reported so far would be allocated to Anadarko on that 25 percent ownership basis.

Anadarko has insurance to cover the first $178 million of its share of clean-up costs and another $1.6 billion is available from the Federal Oil Spill Liability Trust Fund. The company also has about $3.5 billion in cash on hand, $1.3 billion of available revolving credit, and no debt due through the rest of 2010.

The deepwater drilling moratorium in the U.S. would have some impact on Anadarko but Moody’s notes the company could shifts exploration and development plans to other parts of the world for the next few years if necessary.